QUESTION $5$

On January $1,$ Year $1,$ Faux Sure, Inc., borrowed $$40,000$ on a five$-$year, $7\%$ note. The loan will be repaid in $5$ equal installments of

$$9,756$ each year, beginning on December $31,$ Year $1.$ Interest Expense for the year ended December $31,$ Year $2,$ will be Interest

Expense for Year $1.$

The answer cannot be determined from the information given.

lower than

the same as

higher than